SINGAPORE (Aug 20): I wrote about the growing empirical evidence of declining income mobility some weeks back. Few would dispute that this is happening, in both the developed and developing worlds. There may be more debate over the reasons behind this phenomenon but the unequal distribution of income growth and wealth inequality are, without doubt, the key factors.
Economic inequality has risen rapidly, especially in the past decade, perpetuated by digitalisation of economies and, perhaps unwittingly, by central bank policies in the aftermath of the global financial crisis.
Digitalisation and technology have been especially disruptive for small businesses while favouring larger and larger corporates. Last week, I talked about the inevitable monopolisation of the economy by technology giants. This concentration of bargaining power has kept worker wages stagnant even as top management and shareholders reap ever-higher salaries and profits.
